B2B Sales Comp Plan - Hints, Help, and Everything More

uix_expanduix_collapse

New Member

We are looking to build a sales team and we are starting to work on the Sales Compensation plan, we are a Business to Business (B2B) company, so the rules are a bit different for a B2B company over a B2C company.

We don't have any real capital at the moment, so we are going to try to build a sales team of 100% commissions independent sales reps that can set their own hours, but we are running into a couple of issues of how to do it. I have a bunch of network marketing friends who have tried to help me with their comp plans, but it is really driven off of forming a team and profiting from people below them, but we can't do that with a B2B one.

So, we are trying to figure out different things like:

1. Should we base it off revenue? Gross Profits?

2. Should we try to get as MANY as possible in an area, or should we keep it low number so we don't saturate a market and set the reps up for success instead of the business name.

3. Should we do a HIGH based commission with very low bonuses or low commission with huge bonuses?

These are all things I don't know about when setting up a comp plan and sales strategy with it, so I am looking for ANY insight into what we should do, as we have to do it 100% commissions at the moment as we don't have any type of capital.

uix_expanduix_collapse

Member

We are looking to build a sales team and we are starting to work on the Sales Compensation plan, we are a Business to Business (B2B) company, so the rules are a bit different for a B2B company over a B2C company.

We don't have any real capital at the moment, so we are going to try to build a sales team of 100% commissions independent sales reps that can set their own hours, but we are running into a couple of issues of how to do it. I have a bunch of network marketing friends who have tried to help me with their comp plans, but it is really driven off of forming a team and profiting from people below them, but we can't do that with a B2B one.

So, we are trying to figure out different things like:

1. Should we base it off revenue? Gross Profits?

2. Should we try to get as MANY as possible in an area, or should we keep it low number so we don't saturate a market and set the reps up for success instead of the business name.

3. Should we do a HIGH based commission with very low bonuses or low commission with huge bonuses?

These are all things I don't know about when setting up a comp plan and sales strategy with it, so I am looking for ANY insight into what we should do, as we have to do it 100% commissions at the moment as we don't have any type of capital.

uix_expanduix_collapse

Community Leader

Community Leader

We are looking to build a sales team and we are starting to work on the Sales Compensation plan, we are a Business to Business (B2B) company, so the rules are a bit different for a B2B company over a B2C company.

We don't have any real capital at the moment, so we are going to try to build a sales team of 100% commissions independent sales reps that can set their own hours, but we are running into a couple of issues of how to do it. I have a bunch of network marketing friends who have tried to help me with their comp plans, but it is really driven off of forming a team and profiting from people below them, but we can't do that with a B2B one.

So, we are trying to figure out different things like:

1. Should we base it off revenue? Gross Profits?

2. Should we try to get as MANY as possible in an area, or should we keep it low number so we don't saturate a market and set the reps up for success instead of the business name.

3. Should we do a HIGH based commission with very low bonuses or low commission with huge bonuses?

These are all things I don't know about when setting up a comp plan and sales strategy with it, so I am looking for ANY insight into what we should do, as we have to do it 100% commissions at the moment as we don't have any type of capital.

As it happens, I am actually an independent sales rep for a website marketing firm. We are paid on a 100% commission basis, and at one time, did have occasional bonuses. We also do our own lead generation. Based on that, I would say whether you do a high commission with bonuses, or a low commission with bonuses depends on how much work they are actually required to do. If, like us, they generate their own leads, go with high commission. The reason for this is because, with them spending a large amount of time generating leads, they have less time to do any actual selling. If you provide leads, go with a low commission, because they are more likely to make a sale, and can make more money, even though the percentage is lower. Another advantage of providing leads is you would eliminate more than one rep going after the same client, or a rep trying to sell your services to someone who is already a client. If a combination of both, it would be somewhere in the middle. Of course, each individual's commission would be based on the revenue they bring in.
When hiring reps, you don't want them competing with each other, so you'll want to have as few as possible in a given market. Here again, providing leads would eliminate a couple of problems. If a rep is limited to a certain geographic area, there is a limited amount of potential clients. Once s/he has contacted and/or sold to as many potential clients as possible, their chances of increasing their income drop sharply. If you provide leads, you can have as many reps as you want, and they won't cannibalize each other, nor will they be limited to a certain geographic area.

uix_expanduix_collapse

New Member

As it happens, I am actually an independent sales rep for a website marketing firm. We are paid on a 100% commission basis, and at one time, did have occasional bonuses. We also do our own lead generation. Based on that, I would say whether you do a high commission with bonuses, or a low commission with bonuses depends on how much work they are actually required to do. If, like us, they generate their own leads, go with high commission. The reason for this is because, with them spending a large amount of time generating leads, they have less time to do any actual selling. If you provide leads, go with a low commission, because they are more likely to make a sale, and can make more money, even though the percentage is lower. Another advantage of providing leads is you would eliminate more than one rep going after the same client, or a rep trying to sell your services to someone who is already a client. If a combination of both, it would be somewhere in the middle. Of course, each individual's commission would be based on the revenue they bring in.
When hiring reps, you don't want them competing with each other, so you'll want to have as few as possible in a given market. Here again, providing leads would eliminate a couple of problems. If a rep is limited to a certain geographic area, there is a limited amount of potential clients. Once s/he has contacted and/or sold to as many potential clients as possible, their chances of increasing their income drop sharply. If you provide leads, you can have as many reps as you want, and they won't cannibalize each other, nor will they be limited to a certain geographic area.

Click to expand...

Thanks, yes we are going to be having a CRM, in which they will be responsible for their geographical area. This CRM will be provided with a bunch of COLD leads, however, as they increase their revenue, they will be given Warm Leads in their area (which are leads in their area who have shown interest in services), then as they hit another tier, they will be given already existing clients.

About Us

Business Advice Forum is a very active, friendly webmaster and business forum, where members can get advice and support for their small business or website. The majority of our discussions relate to online business, with the majority of the members being webmasters.